High-growth single ETF portfolio with a focus on momentum within the S&P 500
Report created on Jul 20, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
SP Invesco S&P 500® Momentum ETF
SPMO - US46138E3392 100.00%
This portfolio is entirely invested in the Invesco S&P 500® Momentum ETF, focusing on companies within the S&P 500 that exhibit strong momentum characteristics. While this provides a streamlined approach to capturing growth within the U.S. equity market, it also means diversification is low. The ETF's sector allocation leans heavily towards Technology and Financial Services, with lesser exposure to sectors like Real Estate and Energy. This concentrated approach can offer significant growth opportunities but also exposes the portfolio to sector-specific risks.
Growth
Historically, this portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 22.19%, with a maximum drawdown of -30.93%. These figures highlight the portfolio's potential for high returns, albeit with significant volatility. The days contributing to 90% of the returns total 38, indicating that a small number of days drive most of the portfolio's performance. This underscores the importance of staying invested through market fluctuations to capture these critical periods of gain.
Projection
Using a Monte Carlo simulation, which projects future performance based on historical data, the portfolio shows a wide range of outcomes. The median projection suggests a potential return of 1,723.1% over the simulation period, with all simulations yielding positive returns. However, it's crucial to understand that while Monte Carlo simulations provide insight into possible outcomes, they cannot predict future market movements with certainty.
Asset classes
- Stocks 100%
The portfolio's allocation is 100% in stocks, specifically within the S&P 500, reflecting a growth-oriented strategy. This asset class is known for its potential for high returns over the long term but comes with increased volatility compared to bonds or cash. The absence of other asset classes means the portfolio lacks the buffer that fixed income or alternative investments can provide during market downturns.
Sectors
- Technology 23%
- Financials 20%
- Consumer Discretionary 15%
- Telecommunications 15%
- Consumer Staples 9%
- Industrials 9%
- Utilities 3%
- Health Care 2%
- Energy 2%
- Real Estate 1%
The sectoral allocation shows a heavy tilt towards Technology and Financial Services, followed by Consumer Cyclicals and Communication Services. This composition is reflective of the momentum strategy, which often favors sectors experiencing rapid growth. However, the concentration in a few sectors can increase the portfolio's sensitivity to sector-specific risks and market cycles.
Regions
- North America 100%
Geographically, the portfolio is entirely allocated to North America, offering no exposure to international markets. This geographic concentration enhances the portfolio's vulnerability to U.S. market fluctuations and misses out on potential growth opportunities and diversification benefits available in developed and emerging markets outside the U.S.
Market capitalization
- Mega-cap 54%
- Large-cap 35%
- Mid-cap 11%
The portfolio's market capitalization breakdown shows a preference for Mega and Big cap stocks, which constitute 89% of the allocation. This bias towards larger companies can provide stability and lower volatility compared to smaller companies. However, it may also limit exposure to the higher growth potential often found in mid and small-cap stocks.
Dividends
- Invesco S&P 500® Momentum ETF 0.60%
- Weighted yield (per year) 0.60%
The portfolio's dividend yield stands at 0.60%, which is relatively modest. This yield reflects the growth-focused nature of the portfolio, where the primary aim is capital appreciation rather than income generation. Investors should consider their need for cash flow from their investments versus their goal of long-term capital growth.
Ongoing product costs
- Invesco S&P 500® Momentum ETF 0.13%
- Weighted costs total (per year) 0.13%
With a Total Expense Ratio (TER) of 0.13%, the portfolio benefits from relatively low costs, which is advantageous for long-term growth. Lower costs mean more of the investment's return is retained in the portfolio, compounding over time. This efficiency is particularly important in a growth-focused strategy where every percentage point of return matters.
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